A group of development banks and institutions are extending a €157 million ( US$172 million ) project loan to a private wind power project in Ukraine.

The deal is co-financed by the European Bank for Reconstruction and Development ( EBRD ), International Finance Corporation ( IFC ) and Black Sea Trade and Development Bank ( BSTDB ), with support from the European Union, the United Kingdom, and the Climate Investment Funds’ Clean Technology Fund.

The undertaking is one of the first greenfield private projects in Ukraine’s power sector since the beginning of Russia’s invasion of Ukraine in 2022. It forms part of efforts to advance Ukraine’s shift towards renewable energy generation while bolstering its energy security following attacks from Russia on the country’s energy generation infrastructure.

The EBRD and IFC will each lend €60 million and BSTDB €37 million. The total cost of the project is estimated at €225 million ( excluding VAT ), with the rest to be met by equity from the project sponsor, GNG Group or Galnaftogaz, widely known in Ukraine as Okko Group.

The loans are for two special purpose vehicles incorporated in Ukraine, Wind Power GSI Volyn and Wind Power GSI Volyn 3.

The loans will enable Okko to construct and operate wind power plants with a combined capacity of 147 megawatts. The plants are expected to generate at least 380 gigawatt-hours of clean electricity annually, offsetting about 245,000 tonnes of carbon dioxide emissions per year.

The EBRD funding will be backed by financial guarantees from the European Union under its Ukraine Investment Framework.

The financing from IFC and BSTDB are also backed by guarantees from the European Union under the Ukraine Investment Framework as part of the IFC’s Better Futures Programme: RE-Ukraine.

The United Kingdom’s Foreign, Commonwealth & Development Office provided £3.8 million ( €4.85 million ) in grant funding as a first loss guarantee to enable the mobilization of the IFC and BSTDB loans. IFC’s funding package also includes €10 million in debt financing from the Clean Technology Fund.

“With significant power generation capacity in Ukraine destroyed as a result of the war, this investment is crucial to address the severe current energy shortfall, support Ukraine's decarbonization goals and boost the private sector's role in further development of the renewable energy sector in the country,” says Matteo Patrone, EBRD’s vice president for banking.